When Gold is Not Enough : Monetary Policy in a Separation of Powers System

The decision that took the United States off the gold standard was, both then and now, seen as a bold action by an executive branch during the trying economic times of the early 1930s. FDR ran on a platform of reform, and saw virtually no opposition from a Congress willing to let the executive steer economic policy. While a rare event, this moment in history provides a snapshot of how an enterprising president can seize power over monetary policy in times of crisis. What can this case study tell us about how presidents can gain cooperation from Congress? Given the current financial crisis in the United States and abroad, what might the Obama administration learn from FDR's management of the gold crisis? In our paper, we analyze (through the lens of punctuated equilibrium theory) the management of public opinion and Congress by the FDR administration to understand when and how executives can move monetary policy in a separation of powers system